An 'entertaining' one-man show -- on the mortgage crisis

Colleen Mastony, TRIBUNE REPORTERCHICAGO TRIBUNE

In early 2008 "This American Life" producer Alex Blumberg teamed up with NPR economics correspondent Adam Davidson for a special report on the housing crisis. The resulting hourlong show, "Giant Pool of Money," and several follow-up episodes have since been called "the greatest explainer ever heard." For many of us, it's one of the few pieces of journalism that finally helped us understand things such as mortgage-backed securities and credit default swaps.

Blumberg, who lived in Chicago for 12 years before moving to New York in 2002, speaks Sunday at the Victory Gardens Biograph Theater. Tickets have been sold out for weeks for what NPR has dubbed "the most entertaining, multimedia hour on global structured finance you'll ever see."

We caught up with Blumberg, 42, last week to talk about the sympathetic characters and comic moments he found amid the housing mess. Here is an edited transcript.

Q. Who knew that an explanation of mortgage-backed securities could be so entertaining? Did you know from the start that you had to make this topic fun?

A. Oh my gosh, yeah. Adam and I ended up doing the show as co-hosts, so we could talk to each other, point out what was funny and explain things.

Q. Were there specific techniques that were critical in making this accessible and entertaining?

A. A lot of it involves finding the right people to talk to. We talked to a lot of mortgage brokers and lenders and people on Wall Street. A lot of people were dull storytellers. That guy Mike Garner [from "Giant Pool"] saw the humor of being a former bartender who was hired as a mortgage lender. The second trick is asking people how they felt as all this was happening. Also, when we used finance terms, we tried to keep it linked to reality. It's people who are paying the mortgages that turn into the cash flows.

Q. How did you decide to do this story?

A. It grew out of my own interest, really. I had never bought a house and so I didn't have any firsthand experience. But my understanding was that, when you buy a house, [the bank] looks you over pretty closely. But it seemed like that wasn't happening. Adam and I had been friends for a long time. We had both worked together in Chicago. So I was talking to him about this. I was sort of obsessed. I kept wondering, "Why had the banks lent the money in the first place?" I was trying to answer that question. But it wasn't until the whole [system] started crumbling that it was possible to do a story. In early 2008, we started doing interviews. The idea was to start with a homeowner and go all the way up to Wall Street. At every stop, we'd talk to everyone involved.

Q. How many people did you talk to?

A. I'm sure we talked to hundreds of people. And I think we ended up using 10 people [in the show]. It's very rare to find people who are willing to be honest. This was a crisis that was caused by willing participation of every single person. Nobody was coerced. There were people who were lied to and stripped of their equity. And there was fraud. But that was not what caused the crisis. What caused the crisis was something bigger and more systemic that required the involvement of everybody at every step.

Q. How long did it take to put the story together?

A. There was a year plus where I was figuring out what all of this meant. And once we decided, "OK, we're going to do a show," it came together relatively quickly, in three to four months.

Q. Even people who might have seemed like villains in the story turned out to be very sympathetic.

A. We were trying to find the truth, and the truth is that a lot of people involved are decent people. We didn't want to reduce this to a story of heroes and villains, which I think the media was doing a lot of in the early days. I don't like stories where someone is just a villain because I don't think that's ever really true. Sometimes it is, if you have a psychopath. But in this case, people were doing what they, in many ways, were incentivized to do.

Q. Did you ever doubt that the story would work?

A. When we played our first draft for everyone at "This American Life," people were confused and had no idea what we were talking about. It was totally dispiriting. There was one question someone asked and we were like, "You didn't understand that?! That was the whole point!" But it was also encouraging because people said, "You've got something. You just have to do more explaining." That was the process all the way through: excitement but also terror that we weren't going to pull it off.

Q. Have you been surprised by the reaction?

A. Absolutely. It's been crazy and exciting and totally overwhelming. My favorite part [of the reaction] is that people in Congress are using it to explain things to people. "Bad Bank," the third show we did, was mentioned in a congressional hearing. And [Treasury Secretary] Timothy Geithner said, "Yeah, they did a good job."